Lack of framework and education results in short-term adoption
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The Cambodian government has always urged businesses in the country to adopt a green business model or an environmentally-friendly practice. The Industry and Handicrafts Ministry says that small and medium enterprises (SMEs) and handicraft producers’ reliance on fossil fuels such as diesel and coal continue to emit dangerous amounts of carbon into the atmosphere.
Over the years, the green business model adoption has gained traction among SMEs and corporate firms that relocated to Cambodia. But, the absence of a one-stop centre for information along with lack of incentives discourage businesses from going green in the long run.
Is it sustainable in the long run?
Founder of Al Tacos, a food chain, Allen Dodgson Tan, says the use of paper bag packaging instead of plastic bags has slightly impacted his bottomline as it sells meals for only $3.50.
“Our business sits at an interesting place in the market where few cents matter, but we choose to do it anyway,” says Tan.
He explains that although plastics are cheap to manufacture, consumers and the environment would have to pay the price for the damage.
As such, financial incentives usually speed up the process of switching to greener practices. However, he says a better way to raise adoption is to tax disposal plastic items.
Galeno Chua, principal consultant of The Idea, a social impact consultancy, says businesses tend not to conduct thorough research before heading into green practices.
For instance, Chua says, turning to paper cups on the belief that plastic cups are more polluting is a misconception. The lack of education and awareness in this area is what leads businesses to make the wrong choices when it comes to going green.
“Even in paper cups, you have a thin plastic lining that results in micro plastics which are more difficult to biodegrade when they are disposed,” says Chua.
Nevertheless, he notes the rise in awareness in the food and beverage industry compared to other sectors, driven by youths who demand the use of environmental friendly products.
AF Architecture & Development Co Ltd managing director Andeol Cadin says businesses in Cambodia tend to only adopt short-term green business models due to financial offerings.
Many, he alleges, do not understand that the short-term offerings are usually not sustainable in the long-term.
Businesses practicing the green business model may have to lose out on certain clients in the short term due to the costly nature of the model. Cadin adds that a green business model often sees slow profits.
Eventually the law for businesses to comply with green practices will be implemented and businesses that started early will be recognised as the ones that have always practiced a standard of quality,” he adds.
Lack of framework for incentives and benefits
Tan tells Capital Cambodia that businesses which invest in green infrastructure, such as solar energy, can be given tax incentives, like tax holidays and regulatory support.
Cadin, who has been a green building concept advocate, hopes for the right law and facilitation to come soon.
He says the regulations have to be realistic, suggesting that for instance the government could offer 25 percent discount on electricity tariffs for businesses that go green.
Echoing him, Chua says the Environment Ministry environment should not be the only government agency that is working on this initiative.
“You can’t expect one ministry to push the agenda. Social changes happen when everyone bands together,” he adds.
The government aims to introduce regulations and incentives to promote energy efficiency in various sectors, noting that the switch to energy efficient machines first requires a change in consumer behaviour.
This is in relation to rising electricity demand that has grown at an average annual rate of 19 percent over the last 15 years.